Here's our summary of key events over the weekend that affect New Zealand, with news China may be heading for a dollar-debt crisis and just when investors are turning away from US Treasuries.

In the US, foreign investors, especially governments, are tiring of holding American Government debt. New official data shows a foreign investment outflow in September, essentially ending the long term inflow trend. China's holdings in Treasury securities fell by -US$13.7 bln in a month and -US$31 bln in a year. Japan's holdings in Treasuries fell by -US$2 bln since August and by -US$56 bln from Sept. 2017.

China holds about US$1+ tln of US Treasury securities and has about US$3 tln in foreign exchange reserves. All very impressive until you realise that it's private sector owes about US$3 tln in US dollar-denominated debt. A falling yuan exchange rate to the US dollar, or a rise in US benchmark interest rate, will hurt. Both at the same time would hurt even more. Analysts are now worrying about a dollar debt crisis in China.

In the US, household indebtedness rose again in the September quarter, and across almost all types of borrowing. That is now almost 5 years of continuous rises, following almost five years of straight reductions. But at US$13.5 tln, this is now only +6.5% higher than the last peak ten years ago. Interestingly, mortgage debt is still -4.3% lower than in 2008. However other types of personal debt have climbed to more than +45% above its 2008 level to just under US$4 tln. But of course their economy has grown substantially in the past ten years, so household debt as a percentage of GDP has actually shrunk from 87% then to 66% today. (Equivalent New Zealand household debt levels are 76% on the same basis in 2018.)

US industrial production growth stalled in October but the result is probably better than it first appears. Car production was lower, so that means there is strength in the rest of the American factory sector. And that comes as both Pacific and Atlantic ports report surging import volumes.

Canadian factory sales edged higher in data released over the weekend. And Ontario has decided to exempt new builds from its rent control regulations, in attempt to encourage investors to build more. The current law has seen a much lower volume of apartments being built.

Comments that were interpreted as dovish from the newly appointed vice-chairman of the US Fed saw the greenback fall and US benchmark interest rate yields fall. He said interest rates are at near 'neutral' levels which traders are interpreting as meaning the Fed may be near-done raising its policy rate. The next Fed review is on December 20, NZT.

Mexico however has moved again already. Over the weekend they raised their policy rate by +25 bps to 8.0%. They cited their new government's spending and stimulus programs that have driven down the value of the peso and raised the rate of inflation. Mexican inflation is now at +5% and the new fiscal policies are expected to push it a lot higher.

In India, there is a breakdown in the relationship between their central bank and the Government with the Government insisting on easy money, less fight against inflation and protections for weak banks (some of which are its friends). Later today key decisions will be taken to impose more direct 'oversight' of central bank decision-making there.

The UST 10yr yield is starting the week at 3.07% after a net dip of -12 bps last week which puts it at a 2 month low. Their 2-10 curve is still at +26 bps however. The Aussie Govt 10yr is at 2.68%, the China Govt 10yr is at 3.37%, while the NZ Govt 10 yr is at 2.74%.

Gold will start at US$1,221/oz.

US oil prices are stable today at their new lower levels at just under US$56.50/bbl. The Brent benchmark is now over US$66.50/bbl. Oddly, the US rig count is still holding high this week despite these low prices.

The Kiwi dollar is starting the week at 68.8 USc which consolidates a +10% gain against the greenback in the past three weeks. On the cross rates we are also firmer at 93.8 AUc, and at 60.2 euro cents. That puts the TWI-5 at 73.1 and at its highest level since June.

Bitcoin is now at US$5,536 and unchanged from where we left it on Saturday. This rate is charted in the exchange rate set below.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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What have the attendances been like over the recent months compared to now?

I get the feeling a lot of real estate agents will be busy over the coming weeks. NZ main news websites have been flooded with articles recently (going both ways) about NZ property, but Im starting to sense an anxiety among the general public.

Theres going to be a lot of people disappointed to learn that their house is no longer worth 150% of RV, no matter what justification they try to provide. It was enough to justify the 2 Bali holidays, Louis Vuitton bag, Holden Maloo ute and 2 jetskis two years ago, but thats a completely separate conversation.

I was reading some fascinating articles last week about 5 Australian economists predicting what the Australian property market would do for the next 12 months. The article was from August 2017, with it very much being a favorable outlook. Any negative outlooks were held by a minority, if at all. The thing is, the downturn in Australian property prices started only 10 weeks after this article. If you compare the outlooks to the actual outcomes to gulf is staggering!

I don't see it being much different here. We will talk about what could happen, the impacts if it did happen, a counterargument that it won't happen, then the realisation that it is already happening.

So take the Sydney housing market for example - only one of the five economists predicted there would be a price drop, yet the price drop has been four times worse than that one persons worst case prediction.

Yep. Bank economists serving the 'creators of money' have had a tendency to be a little optimistic in Australia. Thank heaven we never had so much interest only debt, negative gearing and spruiking or we could suffer a similar fate. DFA are doing some really interesting stuff at the moment on NZ. Well worth a watch.

"Aha! The problem is, you see, that Australia’s economy is so tied up in construction. It is not that the housing market needs more homes. It’s that our economy can’t afford to stop building them. Not all at once anyway."

Leila - 97 I see on realestate.co.nz. Looks like some seriously over leveraged people trying to keep up with the joneses driving there Remuera tractors . Another 450 sections coming on the market privately, and plenty of developers doing spec homes on carved off sloping sections miscalculating the true cost. Its going to be a blood bath soon.

At 14,341 today .... this will need to be a big week I think, but I have a feeling the lead up to the summer hols could be different this year. If you were a seller today, seeing a market about capitulate, would you list now and try and beat the post summer holiday rush? Or wait until after Christmas when there will inevitably be lots and lots of sellers to compete with? Interesting times!.

Ever notice how little movement is needed in the market to turn everything into a crisis? Volatility hasn't really returned, this is nothing compared to what used to happen. It would be wise to invest in brown pants for the next 2-3 years.